Retail inflation as measured by the Consumer Price Index (CPI) fell to 5.66 per cent in March, according to data from the Ministry of Statistics and Programme Implementation on Wednesday. The country’s rural inflation in March stood at 5.51 per cent, while urban inflation was at 5.89 per cent. At 5.66 per cent, the latest CPI inflation print is the lowest in 15 months, having come in at 5.66 per cent in December 2021. The figure is also below the Reserve Bank of India’s (RBI) tolerance level of below 6 per cent. 

In February, headline inflation based on the CPI had dropped to 6.44 per cent from 6.52 per cent in January. The rate of inflation was still above the tolerance band of the RBI. In January 2023, inflation had jumped to a three-month high of 6.52 per cent from 5.7 per cent in December 2022. 

According to the National Statistical Office (NSO), inflation in the food basket was 4.79 per cent in March as against 5.95 per cent in February and 7.68 per cent in the year-ago period. The price data are collected from selected 1,114 urban markets and 1,181 villages covering all States and Union Territories by the NSO. 

In an attempt to rein in prices, the central bank has so far hiked the benchmark Repo Rate by 250 basis points cumulatively since May 2022. In the last financial year, ended March 31, the RBI had projected average annual retail inflation at 6.5 per cent. In a surprise move, the RBI’s Monetary Policy Committee (MPC), headed by Governor Shaktikanta Das, had last week announced to keep the policy rate unchanged at 6.5 per cent. 

Core inflation, which excludes volatile food and fuel inflation and a key concern for the RBI, has remained sticky above 6 per cent in recent months. The MPC had lowered forecast of the CPI inflation to 5.2 per cent from 5.3 per cent previously.